The firms are suing on behalf of stockholders, and they alleging that B&N misled investors between 25 February 2013 and 5 December 2013. The lawsuits are based on the disclosure made by B&N last month. The retailer mentioned in their SEC filing that they had been notified by the SEC that the retailer was being investigated concerning (one) an allegation made by an ex-B&N manager, and (two) the restatement of earnings made on 29 July 2013.
But according to the law firms, there's more to it than that. Each of the three firms is making different allegations, but there is a fair amount of consistency between each of the press releases. Pomerantz is alleging that B&N made false and misleading statements to shareholders and failed to disclose material adverse facts. Ryan & Maniska concurs with that claim, and in their press release they spelled out B&N's supposed dissembling:
- Barnes & Noble's Nook e-book reader sales had dramatically declined,
- the Company would shutter its Nook manufacturing operations altogether,
- the carrying value of the Nook assets were impaired by millions of dollars,
- the carrying value of the Nook inventory was overstated by $133 million,
- the Company was expecting fiscal 2014 retail losses in the high single digits,
- Barnes & Noble had over-accrued certain accounts receivables,
- Barnes & Noble was unable to provide timely audited financial results for fiscal 2013, and
- the Company might be forced to restate its previously reported financial results.
All of these false and misleading statements reportedly took place between late February and December 2013, and that makes me wonder exactly who was misled and why they weren't paying closer attention to the press coverage.
If you were a B&N stockholder during that period in 2013, the law firms are requesting that you contact them and join in the class action.